A
25%
B
20%
C
15%
D
10%
Solution:
Banks in India retain 15% of deposits as cash. In the Indian banking system, cash accounts for 15% of the total money deposited in the bank. These banks retain a very small portion of the overall deposit to compensate any customer who requests a withdrawal of funds. This money is kept in hand for depositors while the remaining funds are used to fund loans. They are maintaining 15% of deposits as cash gives the bank liquidity and enables it to make loans using the remaining 85% for the generation of credit.
